Friday, Sep. 19, 2008
Kay’s Kloset Closing, Court’s Casualty
Supreme Court Ruling Impact
By John English
Contributing Writer
Editor’s Note: This is the first or a two-part series on the closing of a local, family-run business, Kay’s Kloset, as a result of the U.S. Supreme Court ruling on Kay’s Kloset vs. Leegin Creative Leather Products, and the future implications for all merchandise sellers – both brick-and-motar retail and online sales.
After more than a year of struggling to stay afloat against extreme odds, Kay’s Kloset has finally conceded defeat.
A U.S. Supreme Court ruling last year allowing manufacturers to fix the minimum prices of products sold by retailers has forced the Parker Square clothing store in Flower Mound to close its doors after 23 years of serving shoppers in North Texas.
Owners Kay and Phil Smith say it has been a bitter pill to swallow, especially since this is all they have done for over two decades.
"I’ve never closed a store before," Kay Smith said. "That’s what I keep telling people. They say, 'when is your closing date?’ The answer is, I honestly don’t know. We don’t know because we have never done this. I have done this [worked in a clothing store] since I was 13 years old. I worked for my mom and dad. I have opened stores for them, I have done this for literally 37 years, and I have done nothing but this. I have no idea what God has planned for me."
Kay’s parents ran a clothing store called Courtney’s at which Kay worked before opening the previous Lewisville location Kay’s Kloset. She personally hand-picks all the clothing and accessories carried at Kay’s Kloset.
Kay said the closing of her store is devastating for her and her family, and said she has had to rely heavily on her faith to get through it.
"I see my customers come in here, and they look at me, and it’s like I have to practically re-assure them that I’m going to be okay," Kay Smith said, becoming emotional. "I just look at it this way; I’ve been so blessed over the years. I truly have. God is closing this door on my life, and its been hard. I try to keep a positive attitude, and it is difficult, but because God is closing this door, he is going to open another one."
Flower Mound resident Nicole Brown said Kay’s has been a staple of the community for so long, she is not sure what she will do for her clothing needs now that it is closing.
"I am extremely disappointed," Brown said. "I am a regular customer, along with about three of my girlfriends. I have no idea where I’m going to go now. It’s sad because it is a locally owned business, and it’s a local resident; it’s not a chain. Any time we come here, we find different clothes, different styles – things you don’t find in regular stores."
The Smiths sued the manufacturer Leegin Creative Leather Products in April of 2003 after the company removed its Brighton line of women’s accessories from the store. Kay’s Kloset had sold the manufacturer’s products below the minimum price set by Leegin, which caused the company to suspend all shipments of their products to Kay’s.
In the original jury trial, the Smiths won. The manufacturer appealed the decision to the U.S. 5th Circuit Court of Appeals, and the original verdict was upheld.
An appeal to the U.S. Supreme Court, however, yielded a 5-4 ruling in favor of Leegin in June of 2007.
"If you look at the last year that I carried the Brighton product to this year, you’d see nothing but a straight downward spiral," Phil Smith said. "They represented 40 to 50 percent of my business. In an attempt to save my family business, I downsized in order to build it back up. For about a year, we stabilized the business, but then it began to decline again. We did our best, but when – in a year and half – you take away half of my business, that would leave anybody scrambling."
While the closing of Kay’s Kloset comes as a huge blow for both the Smith family and the Flower Mound community, the possible future implications for other businesses could be equally unsettling.
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